China’s copper financing scandal is hurting imports of the industrial metal into the country, the Hindu Business Line reported.
The problems have cropped up in the metals market after Chinese authorities said they were probing a commodity trading house, Decheng Mining, charged with securing loans worth $435 million after pledging three times over the same metal stocks in Qingdao port. The trading house has also done the same thing with aluminum. The scam came to light months ago and it has seen copper shipments to China drop drastically. In May, copper imports declined 16 percent to 3,80,000 tons from April and last month they slipped further to 3,50,000 tons.
Copper prices could come under more pressure after Citigroup Inc Chief Financial Officer John Gerspach said, during the weekend, that the bank has extended $280 million as loans to non-Chinese subsidiaries of large multinationals at two Chinese ports, Qingdao and Penglai.
With a decline of 0.9 percent to CNY 50,730 ($8,174) per metric ton on Monday, July 21, Chinese copper bar recorded the biggest price drift of the day. The cash price of Chinese copper fell 0.9 percent to CNY 50,930 ($8,206) per metric ton. Chinese copper wire stayed flat at around CNY 50,790 ($8,184) per metric ton. The price of Chinese bright copper scrap was unchanged at CNY 44,300 ($7,138) per metric ton.
The price of US copper producer grade 122 saw a 0.8 percent decline to $3.87 per pound. The price of US copper producer grade 110 weakened by 0.8 percent, settling at $3.87 per pound. The price of US copper producer grade 102 declined 0.7 percent to $4.06 per pound. The Japanese copper cash price remained essentially flat at JPY 749,000 ($7,389) per metric ton.
On the LME, the copper 3-month price fell 0.2 percent to $7,026 per metric ton. Also on the LME, the cash price of primary copper saw little movement yesterday at $7,026 per metric ton.